STATE OF THE UNION: ECONOMY

In Address, Obama to Unveil Competitiveness Blueprint

President will use State of the Union speech to forge consensus for a post-recession recovery plan.

President Barack Obama delivers his first State of the Union address January 27, 2010(AFP/Getty Images)

President Obama said in a video preview released today that at Tuesday's State of the Union he will unveil a blueprint for economic competitiveness, beginning a two-year battle with Republicans over what mix of policies will best catalyze job growth.

"The economy, when I first was coming in was contracting rapidly, we lost millions of jobs, businesses were shuttered, and I think a lot of people were worried about the future," he said in the video, which was distributed by the Democratic National Committee.

"Two years later, we're in a different place. An economy that was shrinking is now growing again. We've created more than a million jobs over the last year. The stock market is back up, and corporate profits are healthy again. So we've made progress, but as all of you know, from talking to friends and neighbors, seeing what's happening in your communities, we've still got a lot more work to do. And so my principal focus, my number one focus, is going be making sure that we are competitive, that we are growing, and we are creating jobs not just now but well into the future," he said.

"And that's what is going to be the main topic of the State of the Union. "

His reelection is two years away, and this speech--arguably the most important one he'll deliver in 2011, because it reaches a prime-time national audience--serves as an unofficial campaign kickoff.

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Obama is spending the weekend annotating and rewriting, administration officials said, but he also intends to clear his mind by watching the NFL playoffs.

In his weekly radio address, Obama put his busy week -- meetings with Chinese President Hu Jintao and a tour of GE's headquarters in New York -- in the context of his efforts to boost America's competitive edge.

"I know we can win that competition. I know we can out-compete any other nation on Earth," he said. "We just have to make sure we’re doing everything we can to unlock the productivity of American workers, unleash the ingenuity of American businesses, and harness the dynamism of America’s economy."

For the State of the Union and Obama's agenda, “[t]hat means,” a senior administration official said, “investing in the key drivers of long-term economic growth while aggressively working to make government more effective and efficient.” Heading into next week, major questions about the speech remained unanswered; details are expected to dribble out between now and Tuesday night. This is Obama's first address to Congress that will feature Speaker of the House John Boehner seated just behind the president in the House chamber.

Liberals are worried that Obama will call for Social Security benefit cuts (which is unlikely) or that he will ask Congress to subject more income to Social Security taxes (which is possible).

Numerous polls released this week show that Americans, facing an unemployment rate stuck stubbornly above 9 percent, rank creating jobs a higher priority than cutting spending across the board. Those same surveys show that Americans don’t have confidence in Obama’s ability to create the jobs they need.

Republicans, anticipating a call for more spending from the president, are moving in their own direction. They won’t let Obama own this debate without a fight. On Friday, Boehner allowed that the president's recent initiatives to lay the groundwork for a more cooperative approach to business are “good public relations for the White House.” A new presidential Council on Jobs and Competitiveness should urge Obama “to reverse the damage the policies of the last two years have done to the business climate, job creation, and the exploding national debt,” he said. Indeed, the Republicans have anointed their most outspoken and expert budget cutter, Rep. Paul Ryan of Wisconsin, to give the GOP rebuttal to the president's address.

Obama’s budget, if focused on the drivers of job creation, may be hard for traditional Republican business allies to oppose.

The address will outline Obama’s 2012 budget. White House officials said that it will be much like the budget he offered last year: an overall discretionary spending freeze but with big exceptions for maritime and road infrastructure, for broadband wiring, and for job-training and retention programs. He’ll ask Congress to spend more money for scientific research, for more patent examiners, and for tax credits for businesses that invest in the U.S.

Obama will devote significantly less time to matters of national security. In the wake of the shootings that left six dead and Rep. Gabrielle Giffords, D-Ariz., seriously injured, officials say he will call again for civility while allowing that vigorous debate is vital to a free society. Several Republican and Democratic senators, including Dick Durbin and Mark Kirk of Illinois and Pat Toomey and Robert Casey of Pennsylvania, will sit together during the speech.

Watch the president's sneak preview of his speech here:

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Daniel Friedman contributed to this report. contributed to this article.